Sandwich generation faces mounting financial strain as retirement savings take a back seat

Americans who find themselves caring for both children and aging parents – the so-called “sandwich generation” – are increasingly struggling to stay on track with their retirement savings, according to new research from Allianz Life.

The company’s 2025 Annual Retirement Study finds that one in four Americans now fit this profile, with nearly half of millennials (46%) and almost one-fifth of Gen Xers (18%) juggling these dual caregiving roles  .

Three-quarters of sandwich generation members say it is difficult to balance their own financial needs and goals while supporting family across generations. The impact on retirement planning is pronounced: 70% report that caring for both children and parents has significantly affected their retirement plans, and 59% say they have reduced or stopped contributing to their retirement savings accounts due to these responsibilities.

Most respondents – 76% – describe the experience of providing care for everyone as “almost like a full-time job.” For many, the situation was a shock, with 60% saying they did not expect to be supporting their parents at this point.

The Allianz study also notes that 78% of sandwich generation members are providing their parents with physical, financial, or emotional support. The demands are especially acute for millennials, with 46% falling into this caregiving category, compared to 18% of Gen Xers.

“Caring for both your young children and your aging parents can be overwhelming for both your time and your finances,” said Kelly LaVigne, vice president of consumer insights at Allianz Life.

“While you may feel it is your responsibility to care for everyone, it’s important to keep your own best interest in mind for your long-term security. Forgoing your own retirement savings now can have costly consequences later on.” 

Separate research from Edward Jones underscores the financial and emotional toll on caregivers. According to that study, 95% of caregivers have some level of financial concern about their own retirement, and 51% have cut back on personal spending. Nearly three-quarters are willing to sacrifice their own financial security for loved ones, with one in four stepping away from their jobs and almost one in five dipping into retirement savings.

Another study by Voya found more than half of caregivers have faced difficulties saving up for unexpected expenses and healthcare costs. When it comes to retirement, non-white Americans were harder hit, with 28% of Asian, Hispanic, and Black Americans reporting a severe or major effect on their retirement savings.

Against that backdrop, Edward Jones' research found majority support for pro-caregiver policies on both sides of the political aisle, with more than three-fourths of Republicans and Democrats favoring those policies. That includes 73% of Americans who voiced support for expanding retirement account contributions for caregivers, and 74% who backed the notion of giving them the benefit of additional "catch-up" contributions.

"As family caregivers are a crucial part of our care systems, their vital role in society demands greater recognition, resources and relief, especially as America's population continues to live longer with more chronic conditions and the need for caregiving grows," said Ken Dychtwald, founder and CEO of Age Wave, which helped conduct the Edward Jones research in May.